Too late to save Nokia?

Nokia's management screwed up royally on several fronts. But it's not too late to save the company.

NEW YORK–Is it too late to save Nokia?

It isn't. Call me naive or in denial, but I’m not prepared to accept a “new normal,” where there exist only two big design sockets–Samsung’s and Apple’s–for the smartphone market.

It’s just too painful to watch these two handset giants–through their dominance in the only market with meaningful growth for semiconductors–shut out practically every chip company who designs modems and apps processors, except for Qualcomm and Samsung.

I suspect I’m not alone in this feeling.

Don’t get me wrong. I’m not here calling for a Nokia bailout. Nokia’s where it is today through Nokia’s own doing.

Looking back, Nokia’s management screwed up royally on three fronts: 1) clinging to Symbian for too long; 2) losing the battle in China; and 3) not choosing Android as an operating system for the company's smartphones.

Many pundits pin Nokia’s failure on the company having been too slow to accept the emergence of smartphones. They believe Nokia’s lack of presence in smartphones has triggered its downfall.

I disagree.

Missed opportunities

Nokia’s grip on the feature phone market had begun sliding way before smartphones became mainstream. While spending a lot of engineering resources perfecting a variety of feature phones for the global market, Nokia unfortunately missed the cues for two key opportunities.

One was the advent of the dual SIM mobile phone, designed to hold two SIM cards. It took Nokia almost a decade before fully embracing this trend. Dual-SIM operation essentially enables mobile phone users to use two services without carrying two phones. Using multiple SIM cards allows a user to take advantage of different pricing plans for calls and text messages to certain destinations, as well as mobile data usage.

Nokia’s close relationship with mobile carriers, however, blurred Nokia’s vision. It stayed off the dual SIM bandwagon out of misplaced loyalty to large operators, who preferred customers to use one network exclusively.

“Symbian in China” was another missed opportunity for Nokia. Before Android took the world by storm, there was reportedly a groundswell of demand for Symbian-based phones among handset vendors in China. But the decision by Symbian (and by Nokia) to make Symbian an open source operating system was too little, too late.

By the time Chinese OEMs could have embraced Symbian, there wasn’t enough engineering talent left at Symbian to make serious inroads into the China’s smartphone ecosystem. Meanwhile, what’s left of Symbian was later acquired by Accenture.

Unpopular decision

Then, Nokia made the unpopular decision of going with Microsoft for its smartphone strategy.

Nokia’s sin, however, wasn’t in partnering with Microsoft. Rather, it was its stubbornness in not acknowledging the rising tide of Android.

Although industry observers understood Microsoft’s powerful influence on Nokia (Stephen Elop who replaced Nokia’s previous CEO, Olli-Pekka Kallasvuo, in 2010 came from Microsoft), they could not comprehend how Nokia could possibly ignore Android. It seemed almost a willful act by Nokia’s management to miss Android’s unmistakable momentum so completely.

One engineering executive working for a leading mobile chip company said, "I just don’t understand why Nokia couldn’t develop Android phones--even in parallel with Microsoft’s Windows phones."

I fully agree with that. If Nokia is going out of business than I beleive it is the lack of the management to understand that software is the key which makes the differen. I still beleive having hardware without own OS will not keep you alive for ever. If I look in Asia everyone can build a smartphone even never knew how it even works. Qualcomm, Mediatek they all have reference designs. So what differentiates someone using the same form factor turnkey solution? I believe this will be also the loss one day for Samsung and Co. What's the difference between them and anyone in the world. By the way one day might be Google waking up and decide not to give Android to the open market or stop development than everyone will be running out of options.

i think eventually microsoft will buy it.
i don't agree that they should have gone with android.
and i own a Asha phone, its no fun accessing it on a small screen, facebook application is waste, and nokia store is joke.

I am glad that you laid this all out. I do remember the days when Nokia actually had a lot of software options -- like Maemo and QT. But none of them really got the proper attention from the management (or they probably didn't know what to do with them) and they ended up being viewed as "taking too long" before turning into gold.
I never understood then why Nokia was making so much investment in so many different software options...

Weird that nobody mentioned how Nokia screwed up Maemo yet. Before Android and iOS, Nokia had the very best mobile OS, but through poor execution they failed to cash in on that advantage. At the time, Maemo was lightyears ahead in mobile web access and was establishing a thriving developer ecosystem.
Only, Nokia at first didn't put it in a phone, but made internet tablets only. Then they did make a phone (the legendary N900), but didn't really market it. You couldn't find it in brick and mortar stores. They were still pushing their Symbian phones.
Then Nokia bought Trolltech, and decided the Maemo GUI should be switched from GTK to Qt. Then they decided to merge with Intel's Moblin and Maemo became Meego, again switching internal technologies (like DEB to RPM packages). Then they decided all this was taking too long, and with an ex-Microsoft guy at the helm, they decided to ditch Meego and go to Windows. Of course through this whole mess they demolished their developer base, especially since most of them came from a Linux background.
I've never seen such a determined effort to fail. Windows 8 is a dog, and there's no way it's going to do Nokia any good. It's only going to drag them down more.
If only they had realized what a gem they had and given it the love it deserved, they would be at the top of the smartphone game now.

So, I use both the Nokia 6310i and the iPhone 5. Both fullfill in what they need to do: An ancient dependable cellphone and a state of the art well integrated smartphone. Don't like Android phones because these are too much of a hack job. That's why Windows phone might actually be a smart move. In Holland and France the Nokia Lumia 920 pre-orders already have beaten iPhone 5, so for now their future looks bright.

One of the build quality which Nokia is good at, consistently, is casing. The case of Lumia 9xx/8xx is simply awesome. In the world, Apple has demonstrated similar know-how but fail in terms of the colours offered. The colours offered by the Lumia-series are so attractive and so special.